SG Strategy 2014 (Macquarie)

SG Strategy 2014: Macquarie has sector report for 2014. The house see green shoots emerging with NODX, retail sales growth and productivity expected to rise. expect the S$ to hold steady and see a quieter year ahead in terms of macroprudential policy. FSSTI 2014 target of 3,376 implies ~13% total return. Top 5 FSSTI and mid-cap stock picks are: Hongkong Land - O/w, TP 7.88, Cheap in so many ways, trading at PB of 0.53x, a ~30% discount to its historical average of 0.74x. CapitaMall Asia - O/w, TP 2.40, Spore’s best play on Asian retail and consumption. Sembcorp Marine - O/w, TP 5.80, S$14b order book is the biggest and healthiest it has ever had, which provides visibility for the next three years. The company is also well positioned vis-à-vis the big-ticket deepwater floater order surge. Genting Spore - O/w, TP 1.85, best play on Spore’s continuing visitor arrival growth. DBS - O/w, TP 18.64, key beneficiary of tapering due to its superior funding franchise and confident that management will continue to deliver value. Mid caps: Sarin Tech - O/w, TP 2.91, growth story with its revolutionary Galaxy series products and strong competitive advantage in both existing and new market. Asian Pay TV - O/w, TP 1.09, delivers an attractive and stable 10%+ yield with management adding long-term growth with expansion into new areas. Super Gp - O/w, TP 4.40, cheap play on rising instant coffee consumption in ASEAN Genting HK - O/w, TP 0.55, valuation as very attractive, has 65% of earnings coming from NCL (45%), which operates out of the US, and Asia-focused Star Cruise (20%). Its 44% stake in Manila hotel and casino operation, Travellers International, accounts for the rest. Ezion Holdings - O/w, TP 2.55, has established itself as the world's no. 2 liftboat contractor within a span of 4 years and has taken a monopolistic hold in the SEU market in Asia driven by its first-mover advantage.